The break below 1200 mid month confirmed that a bigger correction was underway. I then defined the target for wave 4 to 1155 to 1185 by the end of November. On November 29th the SPX hit 1174 which seems to be the low of wave 4.
For the month, the SPX declined a whopping 3 handles!
Outlook on December:
It looks like all is set up for a big end of year rally. Yesterday the market rallied more than 2% and today again more than 1 % and is approaching the yearly highs. Wave 5 of (1) should be underway now:
Price targets for this wave are the 1250ish level (iH&S target and wave 5 = 0.62*wave 1) and the 1290 area (wave 5 = wave 1) and the time target is early January 2011 (wave 5 = wave 1):
Long term nothing has changed:
Still expecting a big rally to new all time highs next year/2012.
In my opinion there is just one possible alternative count worth to be noted:
At the moment everything looks bullish though, so I'm not expecting this to happen. But we learned in September that markets don't have to go down if there is a H&S, a Hindenburg Omen and seasonality.... So just be aware of that. ; )
I wish you a happy Christmas season!
